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Boeing had its worst year in 3 decades and lost the title of world's biggest plane-maker – Business Insider



Boeing’s commercial airplane division lost orders over the course of 2019, recording a net negative order book for the first time in recent memory.

The negative orders starkly demonstrated the damage inflicted on Boeing by the ongoing 737 Max crisis, along with trade wars.

Boeing sales and delivery figures, published by the company on Tuesday, showed a loss of 87 commercial airplane orders compared to its order backlog at the end of 2018, a result of cancelled orders combined with sluggish new purchases.

Although orders have been gradually slowing across the aerospace industry, rival Airbus recorded 768 orders for the year, putting Boeing’s woes into even sharper contrast.

A Boeing spokesperson told CNBC that a net negative year „definitely has not happened in the last 30 years,“ and could not recall whether it had ever happened before.

Boeing’s failure to secure orders left it in a weaker medium-term position than Airbus. The European plane-maker ended 2019 with an order backlog of 7,482 commercial planes, which ensures steady manufacturing and delivery for about 10 years. Boeing had 5,406 airplanes in its backlog.

The poor sales performance and decreased backlog could have major impacts reverberating across the manufacturing sector. Boeing is the largest exporter in the US, and has a robust global supply chain for aircraft components.

The 737 Max crisis was a major contributor to the net negative orders, with only 32 firm orders for the plane placed during year, which was outweighed by cancellations. The order book fell by 182 planes, largely due to low-cost Vietnamese airline VietJet going out of business.

Things were slightly more positive for Boeing’s larger wide-body planes, with a variety of orders placed for variants of its 787 Dreamliner. However, weaker demand than expected from Asian airlines, particularly amidst trade tensions, combined with reduced orders for its delayed 777X program, led to weaker overall performance.

The 737 Max has been grounded since March, 2019, following the second of two fatal crashes within a five month period. The latest generation of Boeing’s successful 737 series, the Max has been under intense scrutiny for a design that has been described as rushed, as Boeing’s processes and culture have been criticized as being more focused on short-term profits than safety and quality.

Getting the plane approved by regulators and back into the air is a priority for new Boeing CEO David Calhoun, who began in the role on Monday.

„We’ll get it done, and we’ll get it done right,“ he said in an e-mail to employees that Boeing released on Monday.

Airbus recorded 654 orders for its A320 family of aircraft, the direct competitor to Boeing’s 737.

Boeing’s deliveries of existing orders also fell, partly because it has been unable to deliver completed but grounded 737 Max aircraft – nearly 400 of the planes are sitting idle at Boeing storage sites. It delivered 380 commercial planes in 2019, the lowest number since 2007. Airbus delivered a record 786 planes.

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DavidsTea to close 82 Canadian stores amid coronavirus pandemic – Global News



Insolvent beverage retailer DavidsTea is closing 82 stores in Canada and all 42 of its stores in the U.S. as it focuses on its e-commerce business and supplying grocery stores and pharmacies.

The Montreal-based company announced Thursday that it is sending notices to terminate the leases at the 124 stores to take effect in 30 days. The move would affect about half of its workforce of nearly 2,500, including all 366 employees in the United States.

It will also seek more favourable lease terms for the remaining 100 stores in Canada and may permanently shut additional locations if landlords are unwilling to negotiate suitable leases.

Read more:
DavidsTea files for bankruptcy protection while negotiating with landlords

It had warned in mid-June that it could begin a formal restructuring depending on the outcome of its talks with landlords.

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The company said at the time that it hadn’t paid rent on any of its stores for April, May and June.

The store closures are part of its restructuring plan after it obtained court protection from creditors under the Companies’ Creditors Arrangement Act and Chapter 15 in the United States Bankruptcy Court for the District of Delaware.

“With the upcoming closure of 124 unprofitable stores across North America, we are certainly making good progress in creating a stronger business model for the future and ensuring the long-term success and sustainability of DavidsTea and our beloved brand,” company founder and interim CEO Herschel Segal said in a news release.

$343-billion deficit projected for 2020-2021 fiscal year

$343-billion deficit projected for 2020-2021 fiscal year

Chief financial officer Frank Zitella said that with the closure of “a significant number of money-losing stores” it will focus exclusively on e-commerce sale which had a penetration rate of close to 43 per cent in the market before COVID-19.

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“All 100 remaining DavidsTea stores have been closed since March 17 due to the COVID-19 pandemic and will remain so until further notice,” he stated.

DavidsTea last month reported that it lost $23.2 million last year on $146.5 million in revenues. That includes a US$4.3 million loss in its fiscal fourth quarter on US$54.8 million of revenues.

The move by DavidsTea comes three years after Starbucks announced the closure of all of its Teavana brand stores. The coffee giant acquired Teavana Holdings in 2012 for US$620 million.

© 2020 The Canadian Press

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Crude Oil Shortages Beginning To Bite In Key Markets –



Crude Oil Shortages Beginning To Bite In Key Markets |

Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for 

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    Last monthOPEC and its non-OPEC allies, known as OPEC+, agreed to extend their deep production cuts through July in an effort to rebalance oversupplied markets in the face of pandemic-hit demand. The cuts were supposed to take ~10% off the markets with July’s cut clocking in at 9.6 million bpd.

    But now there are signs that the pendulum could have swung a bit too far, with the markets beginning to experience shortages of key crude grades.

    There are growing signs that the markets are undersupplied with Urals and Arab Light thanks to continuing deep production cuts as well as a rebound in demand by key customers such as China and Northern Asia.

    The price of Urals, Russia’s flagship grade, has flipped to record premiums to the Brent crude benchmark, briefly changing hands at $2.40 a barrel above Dated Brent last week to reflect the undersupply. 

    That marks a sharp turnaround compared to a discount of more than $4.50 a barrel recorded in April. Urals for delivery to Rotterdam, the main oil refinery hub in northwest Europe, were selling at a premium of $1.90 by the end of June, matching a prior record high. This, in effect, means that Rotterdam Urals were selling at ~$45 a barrel, a far cry from the $15 a barrel they commanded in early April.

    Oil markets in backwardation

    A similar pattern is being observed for other sour crude grades, which are commanding premium prices even with global oil demand still 10% below normal levels.

    Under ordinary circumstances, medium-sour crude that Saudi Arabia and its OPEC partners pump is usually cheaper than light sweet crude with a lower sulfur content. However, OPEC, which mostly pumps medium-sour crude, has dramatically cut output to its lowest level since 1991. Further, Iran and Venezuela, which also supply medium and heavy sour crude, have both seen production severely curtailed due to U.S. sanctions as well as a lack of investment.

    Consequently, Saudi Aramco has been able to raise the price of the crude it sells to refiners for three months in a row. And now for the first time ever, Aramco is selling its most dense crude, known as Arab Heavy, at the same price as its flagship Arab Light, a clear indication of strong demand for medium-heavy sour grades. Under normal circumstances, Arab Heavy sells at a discount of $2-to-$6/barrel to Arab Light. Related: Big Oil’s Investment Risk Is Spiking

    To make matters even more interesting, medium-heavy sour crude for immediate delivery is commanding premiums to forward contracts, a situation known as backwardation. That’s a 180-degree turn from the situation just two and a half months ago when oil markets were in deep contango, meaning forward contracts were selling at a big premium to near-term contracts.

    Production cuts working

    CME data shows that oil futures in general are beginning to flirt with backwardation— a positive sign for oil markets. Back in May, the markets were in super-contango with futures for June delivery trading at just half the value of January 2021 futures; the situation is far less dramatic with futures for August delivery trading at $40.90/barrel compared with $41.54 for January 2021 futures.

    These data sets are encouraging signs that OPEC+ members could largely be sticking to their pledges. Last month, Saudi Arabia and Russia warned members of the cartel that there was no room for noncompliance whatsoever after May compliance clocked in at just 74% of agreed cuts. Notably, Iraq cut just 38% of its promised cuts while Nigeria fared even worse, cutting a mere 19% of its commitments. That said, the importance of dramatic cuts by U.S. producers cannot also be overstated. In May, Reuters reported that North American producers were on course to cut 1.7 million barrels per day by the end of June with the U.S. Energy Secretary Dan Brouillette estimating that U.S. production would drop by 2 to 3 million bpd by the end of the year.

    But more importantly, the latest oil price trends are confirmation that, indeed, the production cuts are working as intended by helping to rebalance the markets.

    The coronavirus pandemic has caused global oil demand to fall off a cliff, with U.S. consumption falling to levels last seen nearly four decades ago. With global oil production at record highs, supply quickly overwhelmed demand leading to an acute storage crunch that triggered the historic oil price crash into negative territory. 

    Source: Quartz

    Oil prices have recovered ever since but remain a long way off the $60/bbl level they were trading at last December. The current oil price of ~$40/bbl could be around the breakeven that Russia needs to balance its books but far from satisfactory for Saudi Arabia, which needs ~80/bbl or majority of U.S. shale producers who need $50-$55 per barrel to break even. 

    With the current level of cuts set to lapse at the end of July, it’s going to be interesting to see whether “OPEC+ is until death do us part,” as Prince Abdulaziz famously quipped a month ago.

    By Alex Kimani for

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      Monteregie virus infections top 60; hundreds of people overwhelm testing centre – CTV News Montreal



      MONTREAL —
      A new testing clinic in the town of Mercier reached full capacity within two hours of opening on Thursday—a sign of how seriously Montérégie is taking its new COVID-19 outbreak, including its younger residents.

      Many of the hundreds who lined up were young and were connected with people who attended the two teenage house parties that started the outbreak.

      They admitted that having parties right now may be a bad idea.

      “The young people [saw] each other too fast,” one told CTV. “We didn’t wait.”

      People around Mercier have good reason for their anxieties. The outbreak has now infected more than 60 people, leading to the closure of many businesses.

      “It was a little bit everywhere in Mercier, so I decided to be tested just to be sure,” said one person who arrived to be tested Thursday morning.

      The region’s outbreak first started at two house parties held by teens, but it had some time to spread—in workplaces, bars and homes—before health authorities realized what was happening.

      Now people are second-guessing their health and trying to figure out if their symptoms match up.

      “The first day I was constantly tired,” said one young man, who said he’s been feeling sick for two days.

      While they were overwhelmed by the lineup, health authorities said they’re happy to see the demand and will set up another clinic for Saturday.

      “People are concerned about their health, and the health of their family, so it’s a good thing they come and get tested,” said Jade St-Jean, the spokesperson for the health district of Montérégie West.

      Officials say the testing will help give them an idea of the scope of the outbreak.

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